The employee benefits consultancy has estimated that 20% of private sector employees, more than four million people, will not benefit from pensions savings or should opt out for other financial planning reasons.
From October 2012 these workers will start to be automatically enrolled into their employer’s pension scheme and many will not opt out irrespective of suitability.
Over the course of just one year the contributions from employers to these ineffective pension plans will total around Ã‚Â£2.1 billion.
David Marlow, development manager at Creative Benefits, said: “We have serious concerns about the cost of auto-enrolment on British small and medium enterprises and our calculations make startling reading.
“There is no doubt that pension saving in the UK needs to increase, however lumping everyone into the same scheme regardless of a person’s age, existing debts and life plans is extremely dangerous.
“We believe that it would not be appropriate for around 20% of today’s employees, who have yet to join a scheme to save for their retirement through auto-enrolment, particularly where a new pension replaces the guaranteed income element of Pensions Credit.”